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Manufacturing

New Zealand's manufacturing industries make an important contribution to the national economy. In the year ended September 2011, manufacturing sector output accounted for 12.2% of real GDP. The proportion of the labour force employed in manufacturing was around 10.3%. Primary sector processing (food and forestry) makes up a significant proportion of the sector.

The food manufacturing industry produces high-quality products for both the domestic and export market. This industry enjoys the advantages of a natural environment that is highly conducive to pastoral agriculture, an absence of major agricultural diseases, the potential for year-round production and an international reputation for excellence. The industry had sales of over $40.2 billion in the year ended September 2011, including more than $27 billion for meat and dairy products. Exports of meat and dairy products amounted to about $17 billion over the same period.

Manufacturing growth peaked at 8.8% on an annual average basis in June 2003 before trending downward over the following four years as the value of the New Zealand dollar appreciated, reducing external competitiveness and domestic currency revenue. Output in the manufacturing sector declined throughout most of 2006 and 2007, leaving it vulnerable to further contraction as prospects for the global economy deteriorated rapidly with the onset of the global financial crisis in late 2008. The impact of weaker global demand and uncertainty over future global economic conditions flowed through to the manufacturing sector, with output shrinking 11.3% on an average annual basis in the year to September 2009. Manufacturing recovered somewhat over the end of 2010 and start of 2011 on a quarterly basis, despite the Canterbury earthquakes, rising 2.3% on a quarterly basis in the September 2011 quarter.

Table 9 sets out the sales of goods and services in the manufacturing sector for the five years ended 30 September 2011.

Table 9 - Operating Income of the Manufacturing Sector by Industry Group
Industry Division Year ended 30 September
2007 2008 2009 2010 2011 2011
(dollar amounts in millions) % of Total
Food            
    Meat and Dairy 19,839 24,369 25,377 23,784 27,500 33.6%
    Other food, beverages and tobacco 11,181 12,514 12,723 12,767 12,739 15.6%
Petroleum, coal and chemical products 7,819 8,166 7,665 7,295 7,718 9.4%
Metal products 7,922 8,410 7,438 7,289 7,659 9.4%
Wood and paper products 7,640 7,468 6,874 7,278 7,101 8.7%
Machinery and equipment 7,032 7,576 6,934 6,636 7,034 8.6%
Printing, publishing and recorded media 3,803 3,836 3,497 3,523 3,545 4.3%
Transport equipment 2,505 2,902 2,467 2,550 2,540 3.1%
Non metallic mineral products 2,820 2,945 2,639 2,455 2,464 3.0%
Textile and apparel 2,472 2,287 2,040 1,973 1,912 2.3%
Furnitures and other manufacturing 2,105 1,980 1,797 1,768 1,765 2.2%
Total 75,137 82,453 79,451 77,318 81,763 100.0%
Manufacturing index[1] 119 115 115 102 102  
  • [1] Base: June quarter 1996 = 100

Source: Statistics New Zealand

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